Arab Revolt Blog #1: Notes on Rentier States and the Stalled Libyan Revolt

After the awesome momentum and massification of the uprisings in Tunisia and Egypt, toppling their autocrats with surprising speed, the Libyan revolt stalled in the East following a key, hard won victory in Benghazi, the country’s second city. Some towns in the West rose up, (notably Misurata, still in rebel hands), and protests developed in Tripoli, but these were swiftly crushed. Although the Gaddafi regime may eventually fall apart under the pressure of NATO bombings, for a while at least it seemed possible that he would be able to consolidate his hold on the West and that a partition of the country was a possible solution to the conflict. The following notes hope to use some of the insights of rentier state theory to elucidate some aspects of the Libyan revolt and its failure to spread, whilst glancing at other similar politico-economic formations in the region along the way.

Image: A Libyan stamp printed for the 13th anniversary of the First September Revolution, 1982

Famously, in a rentier economy the state doesn’t stand above and mediate the web of relationships and transactions of a grounded domestic process of production and accumulation, but rather controls and distributes the revenue from one primary commodity sold on the world market – the key example of course being oil. There is no separation between political and economic power, and the state therefore ’embodies’ economic wealth as well as pursuing its other functions such as ensuring internal and external security etc.

Rentier state theory describes how the state becomes relatively ‘autonomous’ from society. With its control of the externally procured oil rent, it is free from the need to collect taxes for its revenues, and so free from the need to bargain with the various sectors of society over the collection of taxes, and from struggles over the appropriation of internally produced surpluses. According to the model, since the development of democracy is centrally involved with the growth of the state and its need to collect revenues from society (‘no representation without taxation’), there is no powerful political spur to develop representative institutions. Furthermore, to forestall any such spur, the state strives to depoliticise the population, which is generally compliant as long as it is the beneficiary of the state’s largess. With regards to Libya, the formation in 1977 of the Jamahiriya – the stateless state in which citizens were to rule themselves without institutions or political parties, yet with all real economic power remaining in the hands of the governing elite – should be understood in this context, rather than simply as a kooky utopian political experiment dreamed up by an eccentric dictator.

Patrimonialism becomes the norm of business interaction and social advancement in rentier states. Individuals with political power have immediate, real economic power so that personal relationships of dependence hold sway and inequality within society is experienced in fractured, segmentary ways, based on the relative proximity of the vertical patronage networks to the centre of power. Wealth is passed down from the top via various relatively favoured channels. People tend to look for social advancement as individuals, as they attempt to build economically fruitful personal relationships, rather than as part of a group based on productive power or professional identity.

However, the state’s dependency on external forces becomes clear when the oil price declines on the world market and the revenues needed to meet material expectations and ensure social peace dwindle. Some of the inherent vulnerabilities of rentier states then become apparent. The ‘flatness’ of societies with a lack of effective political organisations make mediation more difficult, and Islamists have tended to fill the hole where politics should be, as happened in Libya in the early 1990s. Furthermore, the state may become coup prone as those less favoured in whatever new patrimonial arrangements now hold sway, see the source of both political power and material wealth as one central, and capturable, apex. A new emphasis on instability and state violence has emerged in the rentier state literature as the oil states experienced increasing unrest from the1980s onwards. Saudi Arabia faced a violent anti-royalist, Islamist threat and also the formation of broad though loose civil society alliances demanding substantial reform. Iraq, meanwhile, with its relatively large and heterogeneous population and more diversified economy, has seen high levels of political violence and state repression throughout its modern history, and has never fitted the classic rentier model, whose central theoretical concern was to explain the possibility of consent and social calm in the absence of political rights.

The latent instability of the rentier state means that, by reinforcing the effects of patrimonial ‘corruption’ based on personal relationships, it will also tend to strategically disinvest, underdevelop, forcibly control and repress certain sectors of society, certain institutions and certain population centres, which could become power bases for the capture of the state and the state rent. The marginalisation of the Shia in the oil rich, eastern Hasa region of Saudi Arabia would be an example here. The area’s neglect is due precisely to its economic importance and the Shia’s potential power in becoming active economic agents; of disturbing the top-down distributive nature of the economy centred around the royal family. With regards to Libya, the relative neglect of Benghazi – the heart of the revolt and the historical ‘capital’ of the eastern province of Cyrenaica – perhaps has similar causes. Much of the oil wealth lies in its interior to the South and key refineries and terminals are situated in nearby towns.

The deliberate weakening of the Libyan army is another example. As a key institution with potential national, universalising appeal, and as a threat to Gaddafi (as it has proved to be in various coup attempts) it has been progressively impoverished and undermined, such that Libyans now regarded it as little more than a social club. All real military capacity is concentrated in elite units close to the centre of power such as the brigade run by Gaddafi’s son Khamis. This also explains why the defecting army in Benghazi hasn’t become a real fighting force for the rebel side.

Following this line of thinking, one could also suggest that in some ways the authoritarian, rentier state builds its whole infrastructure of control upon its fundamental vulnerability. The army is needed to discipline or socialise the population, but that begets the need for elite units to watch over the regular army. If these get too powerful then another more dependably loyal elite unit is needed as a counterweight to the first. Add on top of that the secret police, and other layers of secret police to watch the first shadow state etc., (cf. Iraq before the 2003 invasion with its huge army, powerful Republican Guards, then Special Republican Guards, then Fedayeen Guards, each getting closer to the ‘palace’, plus its panoply of competing secret police agencies). At the apex is the set of tight relationships around the leader based on blood ties and/or personal obligation, i.e. the close ‘courtly’ bonds that hold the centre against the potentially unstable, segmented society. At the same time, all this is a way of spending money and creating employment in the narrow, or narrowing, rentier economy. In Libya, a confusing variety of ineffectual popular legislative and consultative bodies, created by the Jamahiriya to destroy the old professional institutions and political parties, are watched over by the Revolutionary Councils and its thuggish regime stalwarts, whilst Gaddafi plays divide-and-rule between various elite factions, his powerful sons and the various tribal structures, which have been reinforced by the regime in the bad times.

Image: A Libyan army tank manned by soldiers opposed to Gaddafi is surrounded by protesters in the city of Zawiy, 4 March 2011

In the straitened circumstances of the oil price slump of the 1980s, worsened by the US-imposed sanctions regime, the Libyan state faced an increase of popular dissatisfaction as subsidies and state employment were cut, inflation on prices of basic goods increased dramatically and various well placed businessmen, regime insiders and Gaddafi family members were able to exploit new opportunities for legitimate business activities following partial economic liberalisation, as well as for corruption and profiteering. Large sections of the Libyan population found themselves increasingly marginalised and impoverished. In response, some amongst the youth sought opportunities in petty, semi-illicit trading activities opened up by piecemeal reform, thus finding themselves in conflict with state rackets at customs and elsewhere, run by state employees resentful of their declining living standards. Infrastructure, schools and hospitals, whilst still free, suffered from neglect, and a severe housing shortage became a major grievance. Following the slump and with a decline in productivity in the oil sector due to sanctions, and spurred by the chastening example of regime change in Iraq, the Libyan elite sought to ‘come in from the cold’ by dumping its WMD programme, resolving compensation for the victims of its terrorist attacks, and by presenting itself to the West as an ally in the ‘war on terror’. Thus the way was opened for rehabilitation and renewed investment in its oil fields. The reformists in the regime, led by Gaddafi’s powerful son Saif Al-Islam, have also, following the lead of the Gulf kingdoms, worked to expand Libya’s investments abroad, financialising the rent and developing their own business interests, thus leaving less for distributive purposes domestically.

However, as the oil state retrenches, it aims to consolidate the patronage networks closer to the centre of power as others wither. Hence perhaps the lack of widespread revolt in Tripoli, the key centre of power, and its large metropolitan area, since enough Tripolitanians may be suspicious of a new Libya with the centre of patronage and power now in oil rich Benghazi, with its potential leadership obviously keen to make concessions to the NATO powers’ oil interests in exchange for military support. At the same time, the high level of regime violence is perhaps testament to the narrowness of the state, with no institution being able to step into the fray to build a new bourgeois order, as the army did in Tunisia and Egypt. Therefore the sense for the ruling group of being involved in a life-and-death struggle, expressed in Gaddafi’s seemingly crazed, apocalyptic rants. It is within this uneven process of restructuring – the denuded Jamahiriya in the reformed, post-sanctions era – that the Libyan revolt exploded and found its difficulties.